A recent incident in Odisha, involving a man’s attempt to access his deceased sister’s bank account without the required documentation, has brought the sensitivity of death claim processes into sharp focus. The case has renewed a difficult debate: Whether financial institutions adhere to unnecessarily rigid protocols during moments of grief, or if a widespread lack of awareness regarding formal procedures remains the primary hurdle for bereaved families.
Legal experts say the episode reflects a deeper gap between regulatory requirements and public understanding, rather than insensitivity by banks.
Banks cannot release funds after a customer’s death without verifying legal entitlement, and the process varies depending on the account structure.
“The most fundamental requirement in every case is the production of a valid death certificate, as it is the only legally recognised proof of death,” said Soayib Qureshi, partner, PSL Advocates & Solicitors.
If a nominee is registered, the process is straightforward. Banks typically require a claim form, the death certificate, and KYC verification of the nominee. “Upon satisfaction, the bank can release the funds without insisting on succession documents,” Qureshi said.
However, if there is no nominee or the nominee has died, banks must establish legal entitlement. This may involve a legal heir certificate, succession certificate, or probate, depending on the value and complexity of the claim.
Sanjna Dua, principal associate, Dua Associates, noted that banks now follow a “simplified procedure”, relying on indemnities and declarations instead of automatically directing families to court.
In joint accounts with an “either-or-survivor” clause, the surviving holder can usually access funds by submitting the death certificate.
When banks appear ‘unreasonable’
Despite these rules, customers often perceive banks as obstructive.
“The perception arises from a disconnect between legal compliance requirements and customer expectations,” said Qureshi.
Families dealing with bereavement often need immediate access to funds, but banks operate within strict compliance and fraud-prevention frameworks. This creates friction, especially when documentation is incomplete.
“The real communication gap arises at the branch level, where families are told to bring ‘papers’ without a clear explanation of what is required,” said Dua.
B. Shravanth Shanker, managing partner at B. Shanker Advocates LLP, pointed out that poor communication worsens the situation. “Bank staff often fail to provide a comprehensive checklist at the first interaction, leading to repeated visits and frustration,” he said.
Experts also highlighted that legal terminology and English-language forms can create confusion, particularly in rural areas.
Nominee is not the legal heir
A key reason for confusion is the role of a nominee.
“In practical terms, a nominee is only a custodian or trustee, not the ultimate owner of the funds,” said Raheel Patel, partner, Gandhi Law Associates.
Under Section 45ZA of the Banking Regulation Act, a nominee can receive funds from the bank, allowing the bank to discharge its liability. However, ownership is governed by succession law.
“The legal heirs are the actual beneficiaries entitled under laws such as the Hindu Succession Act or the Indian Succession Act,” said Sneha Agicha, advocate, D. M. Harish & Co. Advocates.
This distinction has been upheld by the Supreme Court, which clarified that nomination does not override inheritance rights.
As a result, even if a nominee receives the money, they may be required to transfer it to the rightful heirs.
What families should do after a death
Experts emphasise that timely action can significantly reduce delays. Key steps include:
-
Obtain the death certificate immediately, as no claim can proceed without it -
Inform the bank in writing and initiate a claim request -
Check nomination details across accounts and deposits -
Complete KYC and submit claim forms if a nominee exists -
Apply for legal heir or succession certificate if there is no nominee -
Maintain identity and relationship proofs to avoid procedural delays
“Timely and documented communication with the bank significantly reduces the likelihood of disputes,” said Qureshi.
Alay Razvi, managing partner, Accord Juris, added that families should also identify all financial assets early and request a clear checklist from the bank to avoid confusion.
Compliance vs awareness
Experts broadly agree that the Odisha episode reflects a failure of awareness and communication rather than a breakdown of rules.
“Banks can only release funds against legally verifiable entitlement,” Patel said, adding that delays are inevitable if documentation is incomplete.
The incident underscores the importance of basic financial planning, such as registering nominees and maintaining clear records to ensure families can access funds smoothly during difficult times.
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